How Much Does Direct Mail Cost?

As with any business proposition, the cost associated in a direct mail campaign is usually an important factor that is considered by advertisers before they opt for it. The cost that a direct mail advertising campaign might incur depends on a lot of variable factors ranging from the kind target list of addressees that is to be procured to the quality of paper that is used to print the advertising on.

Some of the main variables on which the cost of a direct mail campaign depends on are:

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1. The list of recipients that is procured from a direct mailing list broker - The cost of such a list could vary from 20 USD per thousand addresses to around 200 USD. This is a very important factor on which corners shouldn't be cut for the sake of reducing costs as the success of the campaign is directly linked to the kind of audience which is targeted. If the targeted recipients have no use for the particular product that the advertiser seeks to sell, then the whole purpose of the direct mail campaign is lost. For example, it won't be a successful investment to procure a list of recipients who are singles without issues for a campaign intending to sell baby food, and baby products as most of these singles would not be interested in the product.

2. Quality of the direct mail campaign - If you intend to send out letters or catalogs that are printed on glossy paper with colorful designs and pictures on them, the cost might be much greater than a simple paper mail with printed words on cheap paper. Since most postal services charge on the basis of the size of the mail or its weight, with the costs increasing corresponding to the increase in size and weight of the mail package, it would be prudent to go in for sleek and to the point direct mail ad campaigns, that can reduce the costs considerably.

3. Postage - Postage makes up the bulk of the campaign cost but can be as low as 12.7 cents.

Direct mail marketing is a costly form of advertising campaign that can be embarked upon and yet is the most successful. The cost incurred from start to finish after considering the above factors would be anywhere between fifty cents to a dollar per direct mail. The thing to look out for is the return on the investment that you could get, even if you end up spending a lot of money on the campaign.

If on an average, a thousand mails would generate 20 leads and each of the leads significantly covers the cost of the campaign as well as generates the envisioned profit margin, then it is worth going for such a mode of advertisement. Most postal services offer reduced rates for direct mail campaign permits that allow the advertiser to cut costs on this front. The US postal service offers many direct mailing packages that a prospective advertiser could choose from, depending on his needs.

How Much Does Direct Mail Cost?

In closing, targeting your direct mail marketing is a great way to improve your response rate.

Daniel Bernal is the Vice President at DirectResponseMailers.com which offers direct response mail tips & services.

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When to Test Direct Mail Pieces

Testing direct mail pieces is the best way to track your return on investment (ROI). Direct mail marketing may not be an exact science due to the constant evolution of consumer behaviors and preferences, but some of the guesswork can be taken out of the process by simply testing various messages, materials and methods to small groups of consumers before conducting a large-scale campaign.

When should you test? Direct mailers should test when:

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You want to fine tune a successful mailing for even greater results;

Your cost-per-order fails to meet expectations;

You have new creative and need concrete justification before rolling it out into a full-fledged campaign;

You are interested in expanding your market with a wider list;

Something in the marketing mix changes, like price or offer;

You are introducing a new product.

Test the mailing list

The mailing list is a crucial step in the element of your direct mail campaign. It can make up over 40% of your total responses according to the Direct Marketing Association. The best offer in the world - if not targeted to the right audience - will fail. What is the best type of list? Look at your own in house mailing list. What are the characteristics of that list? Use your house list to build outside lists. There are more than 50,000 lists out there, which are available from a wide variety of sources. The main categories of lists are compiled lists, response lists, paid subscription lists, and controlled lists. Choosing the right one - with its corresponding benefits and features - has the potential to make or break your campaign. They are as follows:

Compiled lists are databases collected from a variety of directories, credit files, and other resources. They are generated for marketing purposes, updated regularly, and give broad coverage of the market, including basic demographics. These lists work best for broad offers and are available at our website (www.zairmail.com)

Response lists are generated from a company's sales records. They may include information about what product was purchased, and how and when it was purchased, in addition to the purchase price and the frequency of purchase. However, response lists are often less complete, and depending on the purchase procedure, may not include the purchaser's name and title. In addition, response lists may not be updated as frequently as other types of lists.

Paid subscriptions lists have the advantage of compiling recipients who are proven buyers, having subscribed to a specific publication and, therefore demonstrating their interest in a given industry or field. They tend to have fewer change of address issues than other lists and provide a relatively targeted audience; however, they may not provide complete demographics.

The result of free magazine subscriptions offered to qualified subscribers who agree to provide detailed demographic information about their companies and purchasing authorities, controlled circulation lists are, as a rule, very niche-oriented. They offer rich demographics and are highly selectable, but may cover only a portion of your entire target market.

As stated before, the mailing list is the most important factor in determining the effectiveness of any direct mail campaign, so it should be selected carefully. Direct mailers can significant improve their response rates by using a more recently updated list. Many compiled lists are updated 2 or 3 times a month.

Vary your offer

The second most influential factor in determining the success of a direct mail campaign is the offer - what you will give people for responding and how you present it. Mailers should make sure that they understand what the recipients want. Keep in mind that the offer must match with the list. Some general tips to improve your offer are:

Be as specific as possible.

Offer something unique and valuable to your market.

Make the offer as risk-free as possible, incorporating

a "limited time trial" or "money back guarantee" if necessary.

Be clear about when recipients must respond by; avoid pressuring prospects with too short of a response time, but don't leave it open-ended. Generally, four to six weeks to respond works well.

Know the difference between the features of your product or service and the benefits. It is not sufficient to discuss features alone; you must tell recipients why they need to respond. When in doubt about the distinction, remember that features are inherent to the product, while benefits attach the feature to a customer need.

Tie your offer to your main benefit. For example, "Act now and save thousands of dollars on online direct mailing costs."
Some offer elements worth testing, include price points, quantity of volume discounts, the way you state your offer (e.g. "save 50 percent" versus "purchase for half price"), and the method of response.

Experiment with your mail package

When considering your mail package, begin with the outside, or you could miss out on a valuable selling opportunity. A consumer's interaction with the typical direct mail piece is like their interaction with a door-to-door salesman. The key is to "make your pitch before the door is slammed in your face."

The average person spends three to five seconds deciding whether to open your direct mail piece, so start selling immediately. Testing outside logos versus blind envelopes can help you determine what's best for your audience.

When testing different mail packages, try to vary the package type (e.g. postcard, letter, self-mailer, etc.) In addition test the use of stamps versus indicia. Even the use of stamps with different designs could produce a noticeable lift in response.

The inside of the mail package should be test also. The following suggestions apply the body of direct mail letters and solicitations:

Use a strong lead. Recipients will likely scan the letter before deciding whether to read it, so seize this important opportunity to make an impression.

State your offer at the beginning and the end of your letter.

Reinforce what you're asking the recipient to do and why they should do it.

Keep the letter short and simple. A maximum of two pages should be used and avoid busy graphics.

Highlight the solutions you can offer. Appeal to the recipient's problems and daily challenges and offer a way to ease their stress.

Use solid facts. Back up your claims with proof in the form of guarantees and testimonials.

Make it easy to respond. Close with a call to action and include a vehicle to do so (e.g. coupon, response card, 1-800 number, etc.).

Test different letter styles, graphic elements, and techniques. Experiment with different elements of your letter including use of signatures, personalization, bullets, aggressive versus non-aggressive tone, etc., to determine what combination of factors will pull the best.

Seasonality, timing and frequency

When are your customers doing budgets? Will the mailing hit at the end of a quarter, when they have little money to spend? Is it best to market your product or service before or after the holidays? If you're marketing to trade show attendees, how far out from the event do you market? Is it best to send e-mail before or after the direct mail piece to alert recipients of its arrival?

The effects of such factors generally vary by market, and are worth testing to determine the best approach for your product or service as they could have a significant effect on the response rate.

General rules for testing

There are several basic rules of testing to ensure success:

Have a good reason for the test.

Test one variable at a time.

Test against a control.

Make sure the test batch and the control mail at the same time.

Test sufficient quantities to get an accurate response.

Track your results.

Above all, continue to test.

Your markets and customers are always changing, so you have to keep testing to find out what works.

When to Test Direct Mail Pieces

Wilson Zehr is a Partner in Cube Management (http://www.cubemanagement.com), a Portland, Oregon based company that helps organizations accelerate their sales. Mr. Zehr is also the founder of Cendix (http://www.cendix.com) the leading provider of channel marketing tools distributed enterprises. Mr. Zehr has over two decades of experience designing and delivering marketing and software solutions for business. He also has extensive experience driving sales, marketing, and strategic alliances with many of the largest technology companies in the world including: Oracle, Intel, Microsoft, Sun, HP, IBM, Xerox, and many others. Wilson Zehr can be reached at Cube Management, wilson@cubemanagement.com, 503.789.2676.

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Basic Principles For Direct Mailing Lists

There are three key elements to every direct marketing campaign: the list, the offer, and the creative. Experts seem to agree that the single most important element is the list. In fact, many direct marketing professionals claim that the relative ratio of importance is: 70% list, 20% offer, and 10% creative. It is ironic, because this is also the element that is least well understood by small business owners and most often over-looked.

Before you start it is important to understand the intent of your campaign and develop a direct mail marketing campaign. Two common goals for small businesses are to either (a) convince existing customers to buy more (loyalty programs), or (b) convince new customers to purchase for the first time (sales prospecting).

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Loyalty Programs:

The value to your business of any particular customer is known as Lifetime Customer Value - this represents the sum of all purchases that customer will make from your business over the lifetime of the customer. It almost always easier to convince an existing customer to buy more of your products or services, assuming satisfied customers, then to sell to new customers. In fact, repeat sales are essential ingredient for realizing lifetime customer value (LCV).

Loyalty programs seek to maximize LCV by building an ongoing rapport with existing customers. Imagine the local realtor who sends a monthly newsletter, the neighborhood garage that sends out a note when it's time for a regularly scheduled oil change, or a local retailer who sends out invitations several times a year for private sales events for "preferred" customers only. These are all examples of loyalty programs.

To do a successful program of this nature it is essential to know who your customers are. Most businesses keep a list of current customers - this is called a house list. The most basic list will include a name and contact information (e.g. address, phone number, email address, etc.). However, the more detailed information that is available the more useful the list will be. For example, it is simple to see how purchase history, income level, gender, and personal data can all lead to more targeted marketing. The more targeted a program the better the chance of success.

Given the importance of repeat purchases, and the role that loyalty programs can play in driving those sales, it is important to gather information on your existing customers. Some businesses routinely gather this information (e.g. auto mechanics, plumbers, and appliance repair people require a completed work-order for every customer). For other types of businesses, a little more creativity may be required (e.g. the "club card" that Safeway offers, or a weekly lunch give-away by a local restaurant for those customers willing to put their card in a fishbowl).

When building this type of list be sure that it is "opt-in". This means to tell your customers that you will be sending them information periodically and get their permission. Most customers will give you permission willingly if they know you will periodically send them offers or information that are valuable to them (e.g. coupons, special offers, the weekly menu, etc.).

No matter what type of business you are in, building an accurate and detailed house list is essential for maximizing lifetime customer value. As we will see, it is also an important first step in driving new sales.

Sales Prospecting:

Even with the most loyal customers there is a natural attrition among existing customers. In fact, this attrition may not be the fault of your product or service - customers move, customers die, lifestyles change, and so do personal preferences. The bottom line is that sales' prospecting is an essential part of maintaining business growth.

One of the most effective tools available for sales prospecting is direct mail. According to the Direct Marketing Association, on average, direct mail returns ten dollars for every dollar invested. However, as noted earlier, the most pivotal element to direct marketing success is having the right list. What does it look like? Where does it come from? Where do you start?

If you are prospecting for new customers you will probably not have their names. But, names of qualified prospects are available through list brokers - or directly from Zairmail. However, to buy mailing lists it is essential to know what your best prospective customers look like. That's where your house list comes in handy. Scanning through your house list you can identify the traits that are common among your best customers. For example, you may find that your best customers live within five miles of your business and have incomes less than ,000. This demographic information will help you purchase a list of customers that will buy.

There are two main types of lists that can be purchased: compiled lists and response lists.

Compiled mailing lists are comprised of information from public records and sources such as the phone book, courthouse records, bankruptcy filings, mortgage deed records and more. On the other hand, response mailing lists consist of individuals who have responded to an offer either through the mail, phone, television, or through other means of mass communication (e.g. a magazine subscription list, a catalog mailing list, etc.).

These types of lists must be understood - each has a set of unique characteristics that enables it to achieve specific and distinct objectives. The key to success is to understand when it is most appropriate to use each kind.

Compiled list are ideal for those businesses that need special demographic selectivity to target a well-defined market, for instance targeting auditing companies specializing in bookkeeping, manufacturers with 50 or more employees, or families with household incomes of ,000 who live within 10 miles of your store. All of these examples are likely to do better with a compiled list than a response list. This is good news if you understand the demographic profile of your customers since compiled lists are generally less expensive than response lists - costing between and per thousand versus to 5 per thousand for response lists.

Response lists are the best choice if you need to cover an entire market of prospects with similar characteristics. For example, if you are selling a specialized software engineering tool, or to every Certified Public Accountant in the State, there are lists available from publications that serve these markets. Often information is even available on how frequently these prospects typically respond to offers they receive. Response lists, especially among those who are shown to respond, can produce higher response rates - thus justifying the higher price.

Both types of lists are not always available for all audiences. So a little research may be required to determine what is available for your target market.

Once the correct type of list is determined the next step is to decide how many names are required. This comes back to your direct mail marketing plan. First, decide how many customers you are trying to acquire.

The answer is not as simple as "as many as possible". Consider how many responses you can handle. If the goal is to have customers call you, and you only have one person to answer the phones, then you probably don't want 10,000 prospects calling you at once. It is a simple rule of marketing that the further you get from the initial point of contact with your prospects the less likely they are to buy. Thus, you only want as many prospects as you can service at any given moment in time.

Similarly, if you have a restaurant that only has seats for 100; it doesn't make sense to attract 1,000 new customers to your doorstep on any given day. If you have the chance to acquire a new customer you may only have one chance. Another simple rule of marketing is that it is ten times easier to get a new customer to try your business the first time, then it is to get them to try it again if they have a bad experience; plan to acquire only as many customers as you can service - and serve them well. In the long-run this is a far more powerful plan.

With your target in mind just work backwards. For example, if you are trying to attract 100 new customers, and you believe that 2% will respond to the promotion, of those 50% will buy, then you will need 10,000 names (10,000 * 2% * 50% = 100). Response rates will vary depending upon the accuracy of the list and attractiveness of the offer. Direct mail professionals often use a 2% response rate as the benchmark for a successful campaign. However, much higher response rates are possible with a targeted and attractive offer.

When using a response list the vendor can often provide you with target counts. These may or may not be enough to meet your goals. You may need to combine several response lists to get the list counts that are required.

With compiled lists the trick is to configure the demographic selects appropriately to produce the size list required. For example, if you need 10,000 names, and you request all females within ten miles of your business, and the initial list count is 100,000 names, then you may have to tighten your search criteria - possibly by adding another select (e.g. income level). In a similar fashion, the demographic criteria can be relaxed slightly if the name count is not high enough.

In addition, this is not a strictly compiled or response list decision. If both are available, and the counts are sufficient, then it may be appropriate to do some small test mailings to determine which produces the best results for your business, whatever type of list you choose. It is always best to do test mailings to a particular list, hone your message, and then mail to the larger list.

Summary:

There are two types of mailings that should be used to drive any successful marketing effort: loyalty programs and prospect mailing. The best results are achieved for loyalty programs when a detailed house list is available. For prospect mailings, lists must usually be purchased - a detailed house list can also be incredibly valuable for purchasing the correct list.

There are two primary types of lists available for prospect mailings: compiled lists and response lists. The correct choice revolves around the type of customer you are targeting, geographic and market reach, and total list counts that are available. The best choice is based on a well thought out direct mail marketing plan and realistic targets.

Direct mail is the most powerful advertising medium available - bar none. Put the right offer in front of the right customer and they will buy. If you need assistance we are here to help. Zairmail can help you purchase the right list for your needs. It is our mission to put all the tools in your hands to leverage direct mail and make your business an overwhelming success.

Basic Principles For Direct Mailing Lists

Wilson Zehr is a Partner in Cube Management (http://www.cubemanagement.com), a Portland, Oregon based company that helps organizations accelerate their sales. Mr. Zehr is also the founder of Cendix (http://www.cendix.com) the leading provider of channel marketing tools distributed enterprises. Mr. Zehr has over two decades of experience designing and delivering marketing and software solutions for business. He also has extensive experience driving sales, marketing, and strategic alliances with many of the largest technology companies in the world including: Oracle, Intel, Microsoft, Sun, HP, IBM, Xerox, and many others. Wilson Zehr can be reached at Cube Management, wilson@cubemanagement.com, 503.789.2676.

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